Definition

The term automated order system refers to a computerized network that transmits instructions to the designated order turnaround system or to floor brokers working on the exchange. The automated order system routes the trader's instructions so they can be quickly executed.

Explanation

The Automated Order System, or AOS, is a computer program that automatically routes orders to the designated order system, in the case of odd lot orders, or directly to brokers working on the floor of an exchange.

Automated trading systems like AOS have the capacity to execute orders with both speed and accuracy. By removing human intervention in this phase of the order-handling process, these systems can lower the number of errors. Finally, they're also able to provide another layer of security against fraud, thereby helping to control risk too.